Oregon Proposes Per Mile EV Tax

Despite the fact that electric vehicles and plug-in electric vehicles make up a miniscule fraction of cars on the road today, government entities are already planning for the financial implications of a time when they reach critical mass.  At some point in the future, states will realize dwindling tax revenues from gasoline sales. And probably, the thinking is – better to get something in place now, while it affects only a few EV motorists, rather than meet the resistance of a possible majority in years to come.

The state of Oregon introduced a bill which passed the House Transportation and Economic Development Committee on April 4th, which proposes to charge drivers of electric vehicles and plug-in electric vehicles $0.0143 per mile, starting in 2014. It’s reasonable that drivers of EV’s are taxed to some extent – after all, they are road users too, and that infrastructure has to be paid for. But is the proposed new tax for EV drivers a good deal compared with taxes other motorists are paying?


Currently, Oregon’s motorists pay $0.30 per gallon to the state as well as an additional amount to individual cities of about, on average, $0.03 per gallon. To make the analysis fair, the $0.184 per gallon which goes to the federal government can be discounted, as the state of Oregon does not collect this.

According to the EPA, the average motorist drives 12,000 miles a year, which translates to about 33 miles a day – well within the scope of any electric vehicle’s range. In order to compare taxes paid by the driver of a conventional economical car, something like the Honda Fit, which gets a combined driving average of 31 mpg, would be a reasonable choice. The Honda, in 12,000 miles, will consume 387 gallons, that will be taxed at 33 cents a gallon. So comparing an EV with the Honda Fit, this is how the numbers run:-

EV tax per year: 12,000 miles x $0.0143/mile = $171.60
Gasoline tax per year: 387 gallons x $0.33/gallon = $127.71

Looks like EV drivers will pay higher taxes, but Oregon assumes the average car today is only getting 21 mpg – so it’s the gas tax revenue on less efficient vehicles that it’s trying to protect. Nevertheless, 2016 CAFE standards will require cars get 34 mpg (even better than the Honda Fit I used above), so shouldn’t the state be using that mileage as the basis for levying an EV tax? Especially since EVs will still only be a small fraction of sales by then?

Then again, maybe this is not such a big deal. Actually it’s probably a good deal. Whether owning a gasoline or electric vehicle, the state of Oregon is charging less than a couple of hundred bucks for the privilege of driving 12,000 miles on roads it must maintain. That doesn’t sound so bad. Either way, the implementation of this tax raises lots of interesting questions: Is per mile taxation a good basis for taxing EVs? Would a flat tax be better? Should governments tax them at all while this technology is getting established? (eg is this analogous to not charging sales tax for internet sales?) It would great to hear what people think about this.

Phil Covington holds an MBA in Sustainable Management from Presidio Graduate School. In the past, he spent 16 years in the freight transportation and logistics industry. Today, Phil's writing focuses on electric vehicles and sustainable business matters in general. Twitter: @PhilCovBlog